Evaluate the company''s break-even point

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Reference no: EM1313098

Compute the Break even point.

Rawlings Company prepared the following budget information for the coming year:

	Product A	Product B	Product C	Total
Sales	$85,714	$1,000,000	$177,777	$1,263,491
Variable expenses	25,714	800,000	97,777	293,491
Contribution margin	60,000	$200,000	$80,000	340,000
Fixed expenses				255,000
Net operating income				$85,000

The budget assumes the sale of 20,000 units of A, 100,000 units of B, and 80,000 units of C.

Required:

a. What is the company's break-even point given the sales mix above?

b. If the budgeted sales mix is maintained, what is the total contribution margin and net operating income if 300,000 units are sold?

Reference no: EM1313098

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